There's been a dramatic shift in why the world drinks coffee — and it's a boon for companies

Judges smelling the aroma of coffee blends at the 11th International Best of Panama coffee cupping competition in Boquete in 2007.
Reuters/Alberto Lowe
Coffee is just like wine.

People don't drink wine only to get drunk. Similarly, many people enjoy coffee for more than just an early-morning or late-night boost, according to Andrea Illy, the CEO of the Italy-based Illycaffè coffee company.

"People were drinking lousy coffee with sugar and milk in order to get the caffeine kick in the morning," Illy told Business Insider in a recent interview.

"There's no time any longer for that. Now, people enjoy the preparation, they enjoy the places where coffee is served, they enjoy the extensive range of preparation and origins that you can taste."

The key to this transformation in the coffee industry has been a surge in the amount of differentiation in roasts consumers can buy, which resembles what happened to the wine industry.

Illy said that when he was growing up in Italy there was not much awareness or concern about variation in wine. He observed that the maximum possible differentiation in wine used to be regional: a bottle of red wine from Tuscany versus white wine from somewhere else, for example. There was also very little distinction in terms of cultivars, or the plant varieties that winegrowers selectively breed to achieve a particular taste.

But there are now more than 400 local Italian varieties, Illy said. And these days you'd be hard-pressed to find two bottles of wine that taste exactly the same.

The coffee industry has also seen a massive wave of independent cafés competing with one another by coming up with new ideas, preparation techniques, and recipes, combined with rehashing some old ideas that worked.

"You get new coffees like cold brew, siphon, and several other preparations that are in the market, compared to what used to be 10 years ago when you could only drink filtered coffee and maybe cappuccino," he said.

Andrea Illy.
Vincenzo Lombardo/Getty
And just as being a good wine taster is something to brag about — and why some choose wine over other alcoholic beverages in the first place — more people now want to be coffee connoisseurs.

The differentiation in various coffee roasts is prevalent in the higher-end gourmet section of the market. Illy described his namesake company as "super gourmet," saying it strove to be the world's leader.

But gourmet usually means more expensive. That implies that many companies looking to ride the upscale coffee trend may need to raise prices, possibly losing some customers. But they'd increase their margins because they are charging more.

This trade off between prices, margins, and market share is something coffee brand managers everywhere are grappling with, Illy said.

The good news, however, is that consumers are willing to pay more than ever for a good cup of coffee, he said.

"There is only one reason to drink coffee nowadays," he said, "which is pleasure."